"Universities challenged'' with Rt Hon David Willetts MP

9 June 2011


  • Rt Hon David Willetts MP, Minister of State for Universities and Science
  • Malcolm Gillies, Vice Chancellor, London Metropolitan University
  • Gervas Huxley, Department of Economics, Bristol University
  • Tim Leunig, Chief Economist, CentreForum; LSE and report author
  • Chair:

  • Chris Cook, Education Correspondent, Financial Times
  • The new university funding regime gives universities an incentive to charge as much as they can. That most are announcing fees of £9,000 should surprise no-one. Neither students nor OFFA are effective at securing value for money. That is bad for students and bad for taxpayers, who pick up the bill for unpaid student loans.


    The report Universities challenged sets out a way to ensure that universities offer value for money. Rather than giving universities a quota of places, and allowing them to set their own prices, they would be required to bid for places, which would be awarded to those institutions that offer good value. In addition, universities must respond to students more. If more students want to go to one university than another, then, so long as that university is willing to take them, and so long as there are no implications for public spending, that university should expand, and the other contract.

    We cannot say for sure how much a university education should cost. But we note that BPP are offering courses at fees below £4,000 a year, that London Metropolitan University has announced that it will be charging less than £7,000 a year, and that the fees per hour of tuition at St Paul's Girl's School imply university fees of around £5,000 a year.

    Sector-wide fees of £9,000 are not necessary, and should not become the norm. But to avoid this we need to create real, sustainable incentive mechanisms to deliver fees that make sense for students and taxpayers. This seminar set out how to do that.